Thursday, 21 July 2011 14:53

Polyplex ready to build $187 million plant at industrial park

Decatur Daily
City’s new industry plans to ‘hire locals’
Polyplex ready to build $187 million plant at industrial park
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A company from India soon will discover the benefits of hiring Alabama workers, Gov. Robert Bentley told a local audience as he welcomed Polyplex USA to Decatur on Wednesday.

“You’ll find that these people who work for you in this great state will be the best workers you could possibly have,” Bentley said.

Polyplex plans to build a $187 million polyester film plant in Morgan County’s Mallard-Fox Creek Industrial Park. Bentley, Polyplex and local and state officials gathered for the official announcement Wednesday afternoon at the Decatur Country Club.

The manager of the plant will be Jeff Hudspeth, formerly of Covington, Ga.-based film manufacturer SKC Inc. Hudspeth said a team from India will be actively involved in the construction process, but he expects most employees Polyplex hires once operations begin will be local.

“It makes more sense to hire locals,” he said.

He said Polyplex is an excellent employer, noting it laid off none of its 1,000-person global workforce during the economic downturn.

“It’s hard to get a job here, but once you’re in, you’re family,” Hudspeth said.

The plant, which eventually will employ 150, will begin operations in the fourth quarter of 2012. Polyplex will move its U.S. headquarters from the Dallas area to Decatur when the plant is complete.

Construction on a 42-acre tract to be acquired from Steel Technologies, near Hexcel Corp., will begin in August.

The company will generate about $673,000 a year in school taxes, of which $506,000 will go to Decatur School District.

“We always felt we needed to have a significant presence in North America,” said Amit Kalra, president and general manager of the company. “We came to the point where we felt we needed to be closer to our customers.”

Kalra said the India-based company initially looked at locating in Mexico. While costs would have been lower there, he said high worker productivity in the United States led the company to focus on the United States.

The company looked primarily in the Southeast because of its right-to-work laws, Kalra said.

Its only other plants are in India, Thailand and Turkey.

“This is truly a great moment for our company,” said Sanjiv Saraf, founder and chairman of Polyplex. “This plant will represent the company’s largest single capital investment ever.”

Saraf said the efforts of Morgan County Economic Development Association President Jeremy Nails, state Sen. Arthur Orr and others were so compelling that even tornadoes could not keep Polyplex away. On April 27, when a tornado hit within 200 yards of the Polyplex site, company officials were meeting with state and local economic development officials in Decatur.

After looking at sites in four states, Polyplex settled on Decatur in part because of its transportation infrastructure.

“The people here were good to work with,” Kalra said of the economic development team. “It was very well coordinated compared to other places we considered.”

The company, which Kalra said will run three shifts, will produce thin plastic films used primarily for food packaging, such as potato chip bags. The film also is used on the back of roofing shingles.

The Decatur Industrial Development Board on Wednesday approved abatements of noneducational taxes.

The total abated property taxes for state and local governments will be about $547,000 a year for 10 years. IDB agreed to abate an estimated $5.75 million in state and city sales taxes during the plant’s construction.

The company also will receive $350,000 in local cash incentives over seven years, provided it meets employment milestones. At a meeting Wednesday, the board of the Morgan County Industrial Park and Economic Development Cooperative District approved the payments, which come from the Tennessee Valley Authority in-lieu-of-tax payments otherwise payable to Morgan County and its municipalities.

The state will provide additional incentives to Polyplex, but officials with the Alabama Development Office would not provide details Wednesday because they said the agreement was not finalized.

A lawyer for Polyplex, Sonjui Kumar, also declined to provide details of the agreement.

“There are some statutory incentives that they made available to us, and then there are some discretionary incentives that the governor and the economic development people put together,” Kumar said. “The governor’s not signed it yet, so I wouldn’t want to talk about the specifics.”

The project will go in two phases. Officials hope to begin a second line in late 2015.

Average wages at the plant will be $48,000 a year after the first phase, not including benefits. Officials said the average wage will rise to $51,000 after completion of the second phase.

The film Polyplex produces will be a thinner version of that produced by AlphaPET. Like AlphaPET, Kalra said his company expects to obtain some of its raw ingredients from BP Chemicals in Decatur.

“BP was instrumental in getting us on the radar for this project,” Nails said.

At the announcement ceremony, EDA Chairman Lynn Fowler said Polyplex’s decision confirmed the wisdom of the regional approach that led to the creation of Mallard-Fox Creek Industrial Park.

“It’s a great day for Decatur and Morgan County,” Fowler said. “We’ve got to continue to have that vision to move forward. We can’t let people disturb us and say it won’t work. ... Either help us or get out of the way.”

Give and take

  • Property-tax abatements of $546,618 per year for 10 years, totaling $5.5 million.
  • Sales-tax abatements of $5.75 million during construction.
  • Cash incentives of $350,000 over seven years, provided it meets employment milestones.
  • Unspecified incentives from the state.
  • $673,000 per year in school property taxes, $506,000 of which will go to the Decatur School District.
  • 100 jobs averaging $48,000 per year by late 2012.
  • Another 50 jobs by late 2015.
  • Noneducational property taxes beginning 10 years after construction begins.
  • Increased power sales for Decatur Utilities.

About Polyplex

Polyplex began production at a single plant in India in 1988, later expanding into Thailand and Turkey.

The Decatur plant, its first in North America, will produce polyethylene terephthalate, referred to as PET. The film is primarily used for food packaging.

Phase 1 of the Decatur facility will include a high-speed line that produces 8.7-meter-wide film. It will produce up to 30,000 metric tons a year.

Polyplex is the fourth-largest producer of thin polyester film in the world, according to its website.

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